Order XI Rule 16 CPC: Transferee Of Rights In Subject Matter Of Suit Can Apply For Execution Without Separate Assignment Of Decree: SC

Key Takeaways

• The appellants contended that they were the authorized assigned representatives of the contractors.
• The court was of the view that the objective of the amendment was to deal with the scenarios such as in the present case; to avoid separate suit proceedings being filed and remove the distinction between an assignment pre the decree and an assignment post the decree.
• Since the legislative intent of the amendment is clear, the earlier position of law cannot be said to prevail.

Facts

• Union of India entered into a contract for executing the work of extension of runway at Port Blair Airport. The contractor entered into an agreement where the work was assigned to Vaishno Devi Constructions, one of the appellants. A different part of the work was assigned to another proprietorship.
• The appellants were to act on behalf of the contractor, and were paid a monthly fee for this. Some dues were allegedly not paid.
• The contractor had not paid another set of dues to the respondents, which was settled in the Calcutta High Court. The contractor filed an execution suit to recover the amount.
• The appellants filed claims, but their prayer for interim relief failed, and their objections against the contractor’s legal representatives was rejected by the executing court.
• The appellants contend that they were the authorized assigned representatives of the contractors.
• The claim was based in terms of Order XXI Rule 16 CPC, which relates to application for execution by transferee of decree.

Arguments

• The Respondents directed the court to the judgment in Jugalkishore Saraf v. M/s. Raw Cotton Co. Ltd where it was held that Order XXI Rule 16 contemplates the actual transfer of the decree by an assignment in writing executed "after the decree is passed". The decision states that the transfer of or agreement to transfer a future decree may, in equity, enable the intending transferee to claim the beneficial interest in the decree after it is passed.
• But the appellants contend this position is changed due to the 1976 Amendment made to the CPC, making in inapplicable in the present case.

Supreme Court’s View

• The court was of the view that the objective of the amendment was to deal with the scenarios such as in the present case; to avoid separate suit proceedings being filed and remove the distinction between an assignment pre the decree and an assignment post the decree.
• Since the legislative intent of the amendment is clear, the earlier position of law cannot be said to prevail.
• Thus, there is no bar under Order XXI Rule 16 against assignee from making an application to execute the decree, who had acquired rights prior to decree from. Appeal was thus allowed

Questions

• What are your thoughts on the stand taken by the Supreme Court?
• What is Order XXI Rule 16?

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